Collective Labour Agreement – Social Tool of the Employer

Collective Labour Agreement – Social Tool of the Employer

Development of Kazakhstan’s economy and the increased quantity of employers stimulates development of labour relations in Kazakhstan. At the same time, by entering into labour relations employers and employees frequently do not enter into social-partner relations, despite the fact that the state gives them such an opportunity.

One of the elements of social-partner relations between employer and employee is  a collective agreement which is signed by both parties.

The modern collective agreement combines and reflects the interests of employees and employers insofar as the collective agreement is a consensus of the interests of social partners.
Collective agreements are becoming more widely used, and society and state often focus attention on them.
   
On January 24th 2008 at the first republican forum about social responsibility of businesses, President Nursultan Nazarbayev in his speech asked employers to become more responsive to this type of action – and used the slogan“Sign a collective agreement!” to emphasise his message. This slogan and the associated action is a result of the demands of time and development of social relationships in our society.
   
Collective labour regulation of social-labour relationships contains the following important functions:

• Protect the interests of both sides of labour relations;
• Organization (regulation) of labour relationships;
• Providing of stability for labour relations between employee and employer.

A Collective agreement has a mission to protect employers from groundless demands of employees, satisfaction of which may violate the rhythm of the production process and cause economical losses; at the same time it is aimed at also protecting the interests of employees, who are the more vulnerable subject of labour relationships.

The mutual responsibilities stated in the collective agreement allow the employer to plan production costs and predicted profit and for the employees they give certain guarantees.

Furthermore, when conditions of agreement are in a contractual form, this creates a guarantee of social and economical stability, which is provided by prohibition of strikes during the time when collective agreement is in force.  This is why the signing of collective agreement is a process which is aimed to coordinate the interests of both parties.

A functioning collective agreement in an organization indicates its stable development, care for its employees, activity, unity and high education of labour collective, which undoubtedly attracts qualified and competent personnel.

According to article 1 of the Labour code of the Republic of Kazakhstan (further – Labour code) a collective agreement – is a legal act in the form of a written agreement between collective of employees and employer which regulates social-labour relationships in the organization.

The aim of the collective agreement is the regulation of social-labour relationships at the level of organizations, providing a combination of normative and contractual regulating of these relationships, and therefore to realize more effectively legal norms fixed in legislation taking into consideration the interests of employees and production development.

The signing of collective agreements starts from preparation of collective agreement project, which may be initiated by any of the parties.  The initiative begins by sending a signed proposal of the collective agreement to the other party. The party which receives such a proposal is obliged to review it within 10 days and to enter into negotiations.

To form the project of collective agreement and its discussion the parties create a special commission. The order of commission creation and rules of its activity is not regulated by legislator and is open to the parties’ discretion.

The commission forms and discusses the project of collective agreement. After formation of a unified contract the commission sends it for discussion by the organization employees. The coordination order of the collective agreement project by the organization employees also is not regulated by the legislator. The forms of discussions are specified by the employees of the organization.

After a discussion of the collective agreement project by the employees, the commission updates the agreement taking into consideration remarks and suggestions.

During the discussion of contract project parties opinions may differ by single points. In that case, if parties do not reach agreement, the protocol of controversy should be formed, which will further be reviewed by the reconciliation commission.     

The legislator did not determine a specific period for negotiations, but according to point 5, article 282 of Labour code if there are any disagreements between the parties by separate regulations of collective agreement, parties should sign the collective agreement containing the agreed conditions within one month from the start of collective negotiations with writing protocol of controversy.

So, negotiations regarding the signing of collective agreement may not take more than one month.

Signed collective agreement of the organization within one month after its signing should be sent for monitoring to territorial subdivision of authorized labour agency.

According to the order of ministry of labour and social protection of the Republic of Kazakhstan #14-p from January 20, 2005 monitoring of collective agreements, signed by parties, should be implemented permanently. In case the collective agreement contents violate the rules of applicable law, the authorized state agency adopts measures to address them. At the same time, the Department of Employment and State Control of the Ministry of Labour and Social Protection of Kazakhstan maintains a unified database of signed collective agreements. It follows that the state constantly checks collective agreements of organizations for their legitimacy.

The current labour laws stipulate that the contents of the collective agreement are defined by the parties, at the same time in article 284 of Labour code shows a comprehensive range of issues to be included in the collective agreement and an indicative list of issues that may be reflected in it.

In countries with developed market economies the range of issues that make up the contents of the collective agreement are determined by agreement of the parties. With the development of the collectively-contractual regulation of labor relations, the collective agreement content was constantly increasing. If initially collective agreements were limited by issues of wages, working hours and other conditions of employment, currently in the collective agreement you can find a variety of issues of social welfare workers: social security (payment of hospital, additional pensions and gratuities), social payments (particularly on health care) and additional payments for holidays, etc.

The legislator did not specifically limit the issues to be included in the contents of the collective agreement, because depending on the type of the organization, its location and several other circumstances, the parties may reflect the questions they are interested in within the provisions of the collective agreement. But according to point 3, article 284 of the Labour code collective agreements should not worsen the situation of workers in comparison with labour legislation. Such provisions are considered invalid.

The process of collective agreement effort, takes a great amount of time and funds, and requires qualified legal support.

This is because in our country there is no unified practice regarding such agreements.

Currently, most workers do not set up trade unions or other organizations and do not enter into existing unions which is why it is often so difficult to suggest how and when employees can start the initiative to sign a collective agreement. In such a situation, the employer must demonstrate initiative and provide the conditions for labor collectives to show activity. To do this, it is necessary to convene a general meeting (conference) of workers, draw up a list of issues to be discussed, to draft provisions on the general meeting (conference), which set eligibility assembly (quorum) and establish a procedure for discussion and decision-making, etc.

The first step would be to approve a constitution about the general meeting (conference) of the organization. Without this document it is impossible legally hold a general meeting of workers and it is impossible to take legal actions.

Furthermore, the signing of collective agreement requires the establishment of a commission to discuss the draft treaty, conciliation commission and labour arbitration of the enterprise. These bodies cannot exist without regulatory documents governing their activities, while at the legislative level, they have not been established.

Collective agreement between an employer and labour collectives regulates social and labour relations between them, but is one of the types of agreements which are governed by rules of civil law. The civil law establishes the possibility of the recognition of the agreement as invalid.

However, the Code of the Republic of Kazakhstan on administrative offences specifies administrative liability for failing to negotiate, disrupting the timing of negotiations and for unwarranted rejection of collective agreement signing etc. Therefore, to begin the process of signing the collective agreement it is necessary to effectively represent the amount of work to be carried out and qualified persons involved in its signing.

The organization could ask their lawyers for assistance when addressing these issues.

In the first case, the quality of signed labor contract and its compliance with the current legislation will be controversial, as in house lawyers are themselves employees of the organization and can only protect their interests. However, state lawyers perform diverse legal work and could miss certain legal points that might result in a subsequent invalidity of the treaty or its substantive provisions. Also, formation of collective agreement by the lawyers of the organization takes time away from their primary work.

If on the other hand the employer authorizes a qualified law firm to prepare the collective agreement it can continues to perform its tasks and functions and does not have to worry about the quality of the contract and related documents and acts. In this case, the quality of compiled documents will be guaranteed as the work will be completed by qualified professionals with legal knowledge and a great deal of experience on formation of collective agreements.

It is these components, knowledge and professional experience that will enable the organization to agree with its Labour team on mutually beneficial conditions, in a collective labor agreement that will protect their interests and, more importantly, encourage employees to improve the performance of their functional responsibilities, and encourage an employer to care for their employees.

Best Regards,

Marina Kolesnikova

Lawyer

Corporate Law Department

Tel.: +7 (727) 2445-777
Fax: +7 (727) 2445-776
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